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ACA may lower medical bills, reduce collections and bankruptcy

Repossession and wage garnishment are two of the means used to harass already overwhelmed debtors into repaying their debts. Debt collections are reported to collections agencies, who may take extreme measures such as those mentioned above to ensure their debts are collected. According to some reports, medical bills may constitute half of all collections reported to agencies.

Arizona residents who have planned out their finances in great depth may not have prepared for a sudden medical emergency and the emerging medical bills may be enough to send patients back to the hospital. Filing for personal bankruptcy, either Chapter 7 or 13, is one of the options available to them to put an immediate stop on creditor harassment.

In addition to this, the Affordable Care Act has provisions that may also ease their burden by limiting the collection techniques hospitals may employ to recover their bills. Those hospitals that do not stop using the proscribed methods may lose their federal tax exemption.

Hospitals subsidized through federal tax exemptions must not only publicly provide their financial assistance policies to their patients; they must also refrain from extraordinary collection methods until they can determine their financial situation. In addition to this, hospitals must also limit fees charged to those patients that are insured or eligible for Medicare.

Unfortunately, not all hospitals adhere to these rules and even though they are eligible for reduced costs of healthcare, they are sued by collection agencies and may be driven to bankruptcy unnecessarily.

Readers of this blog may remember reading posts about tips to lower their medical bills, including requesting for financial assistance if they need it and asking to be given a copy of the financial aid policy. Keeping these in mind may help lower their medical bills.

Since taking care of their health is very important, Arizona residents may find themselves with high medical bills despite these precautions. It is important for them to take all steps possible to not only improve their physical health, but also their financial health, even if it means filing for bankruptcy to wipe out their bills.

Source: Chicago Tribune, "Health care law protects some debtors from unscrupulous hospital collections," Elliot Raphaelson, Sept. 4, 2012